Stock-Loan Finder Indicted for Kickbacks and Fraud Involving Stock-Loan Desks of Wall Street Brokerage Firms Charges Include Conspiracy to Commit Securities Fraud and Wire Fraud
An indictment had been unsealed this morning in federal court in Brooklyn alleging securities fraudulence conspiracy and associated fees against Ronald Garcia, a purported stock-loan finder whom did company as Independent Investor Services, Inc. (вЂњIndependent InvestorвЂќ). The defendantвЂ™s appearance that is initial arraignment is planned with this afternoon before united states of america Magistrate Judge Marilyn D. Go, in the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, ny. The way it is happens to be assigned to united states of america District Judge John Gleeson.
The indictment had been established by Benton J. Campbell, united states of america Attorney when it comes to Eastern District of brand new York, and Joseph M. Demarest, Jr., Assistant Director-in-Charge associated with the Federal Bureau of research, ny Field workplace.
The fees arise away from a continuing industry-wide investigation into allegations of bribery and kickbacks when you look at the securities-lending industry, also referred to as the stock-loan industry. Securities companies usually borrow and loan securities among on their own for several reasons, including assisting transactions that are short-sale. Stock-loan finders will help these companies by locating inventories of a offered safety and borrowers that are matching loan providers in stock-loan transactions. The research disclosed that stock-loan traders at a few brokerage companies funneled millions of dollars in fraudulent finderвЂ™s costs for their co-conspirators, usually where no finderвЂ™s services was in fact rendered, in return for money bribes and, in a few instances, re payments to your tradersвЂ™ loved ones. Up to now, 30 people have been convicted in this region of federal kickback and bribery schemes when you look at the stock-loan industry, including former traders that are securities-lending A.G. Edwards and Sons, Inc.; Janney Montgomery Scott LLC; JP Morgan Chase; Kellner Dileo & business, Inc.; Oppenheimer & Co., Inc.; Morgan Stanley; National Investors Services, also referred to as TD Waterhouse; Nomura Securities International, Inc.; Pax Clearing Corporation; PFPC internationally Inc.; Schonfeld Securities, LLC; and Van der Moolen professionals United States Of America, LLC.
The indictment that is six-count today charges Garcia with conspiracy to commit securities and cable fraudulence, securities fraudulence, and wire fraudulence. As alleged when you look at the indictment, Independent Investor received finderвЂ™s charges regarding the stock-loan transactions between Schonfeld Securities, LLC, and Van der Moolen professionals United States Of America, LLC, whenever neither Garcia nor Independent Investor had done any finder that is legitimate. In return for these fraudulently-obtained finderвЂ™s charges, Garcia paid money kickbacks up to an investor at Van der Moolen professionals USA, LLC , whom in turn paid a percentage associated with kickbacks to a trader at Schonfeld Securities, LLC.
The U.S. Securities and Exchange Commission formerly filed a relevant civil suit against Garcia in federal court within the Eastern District of brand new York.
вЂњThe defendant presumably entered as a fraudulent arrangement and paid kickbacks to corrupt traders at brokerage companies to get their company,вЂќ stated United States Attorney Campbell. вЂњSuch conduct undermines the publicвЂ™s confidence when you look at the nationвЂ™s securities areas and will also be vigorously examined and prosecuted.вЂќ Mr. Campbell thanked the Securities and Exchange Commission for the help.
FBI Assistant Director-in-Charge Demarest stated, вЂњLegitimate stock loan finderвЂ™s charges are payment for genuine work with the securities industry, but this defendantвЂ™s alleged scheme was the white collar exact carbon copy of a no-show task. He conspired to obtain taken care of work he did do, and nвЂ™t paid kickbacks to people who enabled him. The FBI continues to police fraud schemes that add up to theft, whether from building internet sites or brokerage businesses.вЂќ
If convicted, the maximum term of imprisonment for securities fraudulence or conspiracy to commit securities fraud is 25 years. The maximum term of imprisonment for conviction of wire fraudulence or conspiracy to commit cable fraud is twenty years.
The online payday IL governmentвЂ™s situation has been prosecuted by Assistant United States Attorneys Winston M. Paes and Laura D. Mantell.